Insights on the digital media space, covering technology, content and lifestyle choices adopted by today's rising digital tribes worldwide. More importantly, this journal will focus on the business opportunities the digital media space offers to companies today.
This is a common sight now as more citizens are accessing the Internet in China. According to the report from the Wall Street Journal, China now have 338 million accessing the Internet.
What is striking is that only 5% access the Internet in the workplace. Is it due to the culture of doing business in China?
As we dwell on this observation, a Forrester report predicted that Asia will represent over 40% of the world's Internet users, with North America accounting for around 13%. Clearly, this represents a shift in absolute numbers due to geographical population density.
The question is: can this rising number of Internet users be monetized?
The last time I received a physical coupon was in the newspaper delivered to my home. You see, there is a service provided by Singapore Press Holdings (SPH) where advertisers can insert such coupons in the bundled newspapers to be delivered to homes around the country. Since the delivery is managed and controlled by SPH, the advertiser has the choice of selecting which geographical location they wish the coupon is to be delivered (e.g. the eastern side of Singapore would include towns such as Marine Parade, Bedok and Changi). An example of such a physical coupon is shown below.
Setting aside the theory on how such direct marketing tactics are developed by advertisers, I have to admit that I will take the trouble to look through the coupon with great interest. But the intent to encourage me to buy a product otherwise would not will fail on me because the promotional product has to be something that I need now, or aspire to own in the future. Hence, the coupon has to address my demand requirements at the point of receiving the promotional instrument (i.e. coupons).
Assuming that the product or service in the coupon addresses this need of mine, I will pay close attention on the the nature of the coupon. This nature represents what the coupon seeks to communicate:
Is it a price discount?
A conditional offer such as a ridiculously low price for the 1st 100 customers?
The nature mentioned above will determine whether I will make a purchasing decision or not (though I must admit that the second nature will not interest me). Having said that, I must confess that this behaviour which I described earlier somehow indicates that I am reliant on coupons to make purchasing decisions for certain products. This is because coupons intentionally influence the demand and supply of a purchasing decision. Prior to this influence,I (i.e. consumer) may not have reached a point where the demand is so overwhelming that I have to make that purchase. As such, coupons do play a major role in influencing my purchasing decision for specific products. As a general rule, this influence will be the most effective for products which are not commoditized in the market such as mobile handsets, vehicles and consumer electronics.
Hence, companies that use coupons as a promotional strategy will need to make sure that the product or service in the promotion matches the need of consumers like myself. This matching is aligned to my earlier posting on market segmentation on user databases. In such instances, the medium which is employed to distribute the coupons play an important role in changing the usage pattern of consumers such as myself. For example, a broad product category such as food and beverage, groceries or clothing will see the coupons being distributed through newspapers which are perceived as mass media platforms (see below).
As the products get more specific such as consumer electronics, then the medium used to distribute the coupons will change accordingly. For instance, a coupon that offers three months free membership to a gym will work best in magazines that focuses on exercise and general fitness. Hence, the effectiveness of coupons to influence consumer behaviour is dependent on first and foremost, market segmentation and matching products to consumer needs. Following this, the distribution of the coupons through the right channels is critical as such channels represent the proxy of consumer needs. Mixing both together with the right execution will probably get me to buy more than I would usually have done (which may not be a good thing given this economy...).
When I think of direct marketers, the first thing that comes to my mind is: harassment. And yet, the vast majority of of the direct marketing industry continues to adopt what I consider to be "untargeted marketing". In most instances, these direct marketing firms acquire databases from other firms which seems to have developed a great business model to collate mobile numbers and email addresses of individuals. Despite myself being part of the direct marketing industry with my present company, I still find it difficult to figure out how these database firms can get these mobile numbers with such ease with the strict privacy regulations adopted in countries such as Singapore. But that is another topic to be discussed in a separate post.
But seriously, why don't these direct marketing firms target their offers to the right audience in the first place? Speaking from my personal experience, I have been contacted by telemarketers (it seems that contacting unsuspecting individuals on their mobile handsets is the preferred mode of operation) throughout the working week with offers to join spas, take up a yoga course and sign up to a seemingly unlimited number of credit facilities from banks (which is not a good offer to make to today's materialistic Generation Y individual).
In the past, I used to get these untargetted advertisements in my mailbox.
This led to a massive problem of such mailers being dumped by presumably frustrated home owners (I do make it a point to dump them in the nearby rubbish bin). This problem has since been solved by the company responsible for delivering the mail to our mailboxes with anti-junk mail features such as appointing the postman as the sole person with the key that opens all the mailboxes so as to deliver the mail to them. Nonetheless, the junk mail still persist with the postal company now working as the advertising agent to deliver junk mail to home mail boxes. This post probably reminds me to contact them and remove my address off their "junk mail" list.
But back to the most common mode of direct marketing - the phone call. While the offer seems to be so attractive when articulated in an almost perfect manner by the telemarketer (no doubt from a script), the unfortunate ending to this conversation is a firm rebuke from me that "I simply have no need for the product"! In particular, I find it absolutely frustrating to receive such calls when I'm at home with my family. The video below best describes how I feel when I receive such calls at home.
While I have no intimate knowledge of the business practices of these direct marketing firms that made these calls to individuals such as myself, I do know, however, that targeting the right message to the right audience is a lot of hard work. I know this as I do this on a daily basis in my role as a Database Marketing Manager in my firm. The fact is that direct marketing is a function, and the delivery method is just a conduit between the firm and the individual. As such, the best practices of direct marketing is consistent in the traditional and digital (media) world as the intent of the message can be communicated through phone, email, SMS, MMS, Location-Based advertising and mobile barcodes such as QR technology.
Hence, the differences in delivering the message should not overshadow the common rule that the right message needs to reach the right audience: We need to target the right message to the most appropriate market segment. No one is saying that this is the nirvana of direct marketing, but it is certainly the best possible way to deliver the best effective advertising message to the right audience.
Using my role as an example, I will need to ensure that:
1. The consumer database has no duplicate entries - Each user will only appear once in the database.
2. Fill in as many demographic information for each user as possible. Usually, surveys are the best means of getting this information.
3. Segment the entire database by demographic profiles such as age bands (i.e. Under 18, 19 - 24, etc.) and occupation (i.e. senior management, manager, senior executive, etc.).
These 3 stages form the foundation of basic database segmentation. What comes next will require absolute discipline and maximum attention to detail:
1. Contact a sample of each segment to deliver the advertising message.
2. Record the result of the entire interaction between the company and the individual
Was the individual interested to find out more?
How many stages did the individual go through in the interaction before deciding on the next action? The stages are similar to what is described as the consumer purchasing funnel.
What is the next action of this individual? Accept the offer or decline?
If the offer is declined by the individual, what would be the reasons behind this decision?
When was the call made - morning, afternoon, evening or at night?
3. Consolidate all the recorded details and identify patterns in the five points above within each database segment.
4. Create a regression model for each demographic segment and identify which variables (i.e. the points above) have the most significant influence to the success of the advertising message.
5. Using the regression model, refine the advertising message and contact the users which meets the specification of a successful individual in the database.
The 5 points made earlier represent how I manage the direct marketing business in my firm. Undoubtedly, I left out the specific details of how I undertake these responsibilities as they are trade secrets. What is commonly known, however, is that the digital world which my business is predominately in (i.e. online, mobile, and digital billboard advertising) gives me the advantages which the traditional world do not have. One such example is the collecting of feedback data from my email marketing campaigns. I am able to find out through a click of a button on the number of individuals who opened an email, clicked on the links in the email advertisement and how many times the email advertisement is being forwarded to another individual. Such tracking abilities are readily available in today's online direct marketing industry. These features are replicated, though in different variants, for the other digital media channels such as SMS, MMS and location-based advertising.
As such, the efficiency of the campaign feedback gives me the data needed to crunch the numbers and creating the regression models needed to identify the variables needed to improve future campaigns. It is only through this constant improvement where direct marketing firms can finally say with conviction that they have made the best effort possible to reach the right audience with the right message and hopefully, at the right time. If these efforts are made, then we won't have instances described brilliantly in the video below.
As of the time of this posting, there's one more hour to go before SingTel starts the festivities leading to the launch of Apple's new iPhone 3G(S). It will be interesting to see if the crowd matches the number of people queuing for the original iPhone 3G some 12 months ago.
Here are some photos leading up to the launch:
All interested Singaporeans are directed to join the queue. However, all business customers are still welcome to visit the mobile operator, which is indicated by a iPhone 3G (S) signboard.
The crowd is building up slowly as the mobile operator mounted an extensive tented environment to cater for all weather conditions.
These individuals are likely to be one of the 1st 100s who will get their hands on the new iPhone 3G (S).
As Singapore awaits the launch of iPhone 3G(S) by SingTel on 10th July 2009, it is perhaps an appropriate time to see how the iPhone has influenced the mobile browsing habits of mobile users in the country. I'll be using data from StatCounter which uses a sample size of more than 3 million websites with more than 4 billion pageviews per month.
As you can see from the graph above, Nokia's browser (presumably Symbian) has swapped the leadership position with iPhone's Safari browser over many months since the start of 2009. Interestingly, there is a divergent break in this flipping trend between the two browsers sometime last month. I decided to do a more focused analysis on this by using data for the last three months (i.e. April to July 08):
It seems that the divergent break started on 14 June 2009 and this gap between the browsers widened since 1st July 2009. As of 8 July 2009, more than 38% of all websites were accessed Nokia's mobile browser in Singapore. In comparison, slightly more than 26% used iPhone's Safari to access websites in Singapore in the same period. It will be interesting to see the effect of iPhone 3G(S) on the mobile browser competition in Singapore following their launch tomorrow.
How is this information useful for marketing professionals? Simply said, the two dominant mobile digital platforms today are Nokia and Apple. I'm sure advertisers know this trend, either through popular perception or through word-of-mouth from the marketing community. Nonetheless, the need to justify and convince senior management such as the CFO or CEO on investments in mobile marketing can now use these trends as the rationale to perhaps develop apps to tap on this increasingly tech-savvy target audience. I'm sure a picture speaks a thousand words for your internal proposal to get the budget needed to meet your marketing objectives.
It has been a long time since I last blogged on my site. Back then I made a promise to myself to get involved in a blogging site that actually requires me to pay money to host the site as I'm a strong believer in ROI (i.e. blog more to justify the monthly fees!). It is not surprising, however, to have the realities of family and working life dictating how much time I can set aside to develop an editorial piece which is worthy to be published in my blog. After all, I am determined to document my personal observations on digital media so that it serves as a journal of my journey in this exciting medium.
It is perhaps fitting that the topic of interest in my observation today is on the realities of social media marketing for businesses today. Running a Google search on this subject will give you 234,000,000 pages in 0.23 seconds. As the number suggests, it's no longer an emerging tool. It is a tool that needs to be taken seriously by the community.
Arguably, it is no longer surprising to hear of a fellow online user having a Facebook account. The service is not only accessible on the PC/laptop/Netbook, but is also on major mobile platforms such as the iPhone, Symbian handsets such as the Nokia N79 and even on the Blackberry.
In fact, Facebook is one of the very, very few Blackberry applications that is certified by RIM to have the clearance needed to be installed on any Blackberry device, despite the high enterprise security features associated with such business-oriented devices.
Indeed, Facebook has transformed the social media scene in the maturing Web 2.0 online world. You can even get a specific URL for yourself now that personalize your Facebook URL in the online world (though I still curse my slowness in getting my personal vanity URL from the site). Under this backdrop, we now see the number of unique visitors to Facebook have exceeded MySpace in November last year, with a staggering 113 million unique visitors in May 2009 alone.
Clearly, social media is no longer a medium used exclusively by tech geeks or net-savvy Generation Y individuals. In fact, Facebook is now used by a broader spectrum of users across various demographic groups. As the graph below illustrates, the site is beginning to see a more broad based participation, signally that such sites
are evolving into a mainstream communication channel.
It is perhaps not surprising that many businesses are trying to get into the social media space in the hope that this will be the next alternative marketing channel. After all, Nielsen Online suggested in a March
2009 report that social networks and blogs are now the fourth most popular
online activity, and ominously ahead of email which is the incumbent
communication protocol since the evolution of the Internet. These sites
collectively host online member communities which are visited by 67% of the
global online population. In particular, Hitwise reported that Facebook users
spend close
to 19 minutes on the social networking site, representing the period where
companies on these social networking platforms can potentially reach out to. This is probably one of the main reasons why established media channels such as CNN chose to integrate Facebook in their online programming such as the recent live telecast of Michael Jackson's memorial in Los Angeles.
Clearly, this rising number represents the size of the target audience which
companies seek to engage and establish an online relationship with. Assuming
that such relationships are positive, the company would have created a parallel
communication channel online to engage and build brand equity with these online
users.
Invariably, questions will be asked on the sustainability of these social
networking sites and virtual worlds that companies are presumably clamoring to
establish their presence in them. Indeed, one of the pioneers in social
networking, MySpace, had to retrench many of
their global staff strength as they seek to compete with the rising
popularity of Facebook.
But how do companies really do business on these social media sites? Is it simply the case of setting up an account or a page in Facebook, with the belief that it will be populated naturally by the more than 200 million users on this social media site?
I would argue that businesses should not use the size of these online communities as the motivating force to establish their online presence in
these social networking sites. These social media sites are a conduit for online communities to interact on issues
which may be relevant to the nature of the business’s operations. This
interaction forms the opinions and feedback which companies can use as a basis
to improve their value proposition to their target audience. Companies should
therefore set aside resources such as a dedicated team that is focused on
reviewing issues discussed on these social networking sites and if need to,
respond to such feedback that allows the company’s position to be delivered with
ambiguity. This is important as the nature of such online interaction is
uninhibited and is not moderated by anyone on these social networking sites. As
such, it is critical that companies respond
unequivocally to issues which may adversely influence the public’s
perception of the company. Accordingly, a proactive and well-thought through
process to interact with these online communities will reinforce the brand
positioning of these companies, and foster a situation where relationships with
their target audience can be built over the long run.
Concurrently, these consumers of social media actively provide demographic
and psychographic data so as to get the most benefit and value from their online
social networking experience. In doing so, these users are presenting companies
insights on the behavioral and lifestyle preferences which are used to
fine-tune the targeting of potential customers on these social networking sites.
As these users in the online communities actively interact with their network
through site-specific applications, uploading and sharing of photographs and
discussions through dedicated group forums, companies will get to experience a
richer set of data about these users. As a result, the targeting of
communication materials to these users is more specific than what conventional
online marketers will do on websites.
Herein lies the realities of social media marketing. It requires a dedicated and deliberate effort to ensure staff are trained to take advantage of this Web 2.0 communication channel. Remember, it is now mainstream, and it will be foolish to ignore it.
